Surprisingly, Used Car Values Hold Steady

In the 2nd quarter of 2017, it seems that used car values have held steady. Leading up to this year, there were predictions that used car values were going to rapidly decrease. This was based on the large amount of vehicles that were going to enter the used car market as returning lease vehicles.

As it turns out, the three major indexes (Manheim Used Vehicle Value Index, the Black Book Wholesale Used Vehicle Retention Index and J.D. Power's Used Vehicle Price Index) that track used car resale values in the United States have all stayed even.

Most experts point increased demand in used vehicles as the reason prices have decreased like earlier projected. These experts feel that a higher proportion of the vehicles coming into that market are SUVs and crossovers that were leased 3 years ago. With gas prices low, demand for new and used SUVs and crossovers has continued to increase. This increase in demand has offset the higher supply.

There are major challenges still in the future for used car values. Leased vehicles and rental fleet vehicles will continue to enter the market. Another challenge comes from new car manufacturers. New car manufacturers have increased incentives all year as they try to bolster new car sales. These incentives will slowly erode the resale values of used cars. Lastly, as auto loan delinquencies rise, auto lenders will tighten their lending policies. With tighter lending policies, loans on used cars will become even harder for subprime customers to get the loans they need.